Techco is a mature company whose management team has a poor track record. There is a possibility that there will be a management turnover to replace the poor performing CEO. You have the following information: With incumbent management team, the firm will: - Generate $50 million in after-tax operating income next year - Reinvest $20 million of this after-tax operating income - Generate a constant growth of 3% a year in perpetuity - Have a cost of capital of 7% If there is management turnover, this is your expectation under the new management: - $50 million in after-tax operating income next year - Generate constant growth of 3% a year in perpetuity - Cost of capital: 7% - The return on capital will double from its current level You estimate the probability of a management turnover at 30%. What is the expected value of the operating assets? Note: expected value = value under incumbent management * probability of no turnover + value under new management * probability of management turnover